The European Bank for Reconstruction and Development (EBRD) has identified flaws in the legal framework for business and the bankruptcy process in its latest assessment of the Czech Republic. But in its 2003 transition report, the EBRD still identified the Czech Republic along with Hungary, Poland and Slovenia, as one of the most successful countries that has reformed and liberalised its economy since 1989.
The EBRD's most pointed criticism was directed at the overall Czech legal framework and bankruptcy laws, particularly on the problems faced by lenders in cashing in or capitalising on assets that have been offered as collateral for a loan.
The Czech Republic scored behind Hungary, Latvia and Slovakia because of its complicated and time-consuming procedures and the overall uncertainty of lenders' rights to collateral when the company that took out the loan enters bankruptcy.
